China's rebar output ends 6-week decline, up 1%

China’s rebar output among 137 steel producers nationwide under Mysteel’s survey finally took a pause from six weeks of falls, up 0.9% or 20,800 tonnes on week to 2.32 million tonnes over July 21-27, mainly as some electric-arc-furnace (EAF) mills had resumed production as they largely made up losses or even managed to enjoy some profits with the sharp decline in steel scrap prices.

During the survey period, the average rebar rolling capacity utilization rate among the sampled producers recovered by 0.5 percentage point on week to 50.9%, while the operational rate dipped further by nearly 1 percentage point on week to 41.6%.

Sichuan, Yunnan and Guangxi in Southwest China and Henan in Central China witnessed the marked on-week gains in their rebar output as many EAF mills are located in these regions.

China’s steel-market sentiment had strengthened recently with the improvement in supply-demand balance. And as of August 1, the country’s national price of HRB400E 20mm dia rebar under Mysteel’s assessment surged Yuan 225/tonne ($33.2/t) on week to Yuan 4,300/t including the 13% VAT.

Over July 26-August 1, the daily trading volume of construction steel including rebar, wire rod and bar-in-coil among 237 trading houses under Mysteel’s tracking grew 19,378 tonnes/day or 12.3% on week to average 176,395 t/d, as market participants’ buying enthusiasm recovered with spot steel prices trending upwards, sources said.

Meanwhile, rebar inventory at both 137 surveyed mills and at commercial warehouses in 35 Chinese cities Mysteel follows thinned further, with the former dropping for the fifth successive week by 13.4% or 377,800 tonnes on week to 2.4 million tonnes as of July 27, and the latter eased for the sixth week in a row, down 6% or 407,700 tonnes on week to 6.4 million tonnes by July 28, both nearing their six-month lows.

Table 1: Rebar Production Survey by Region by July 27